Thursday, April 26, 2007

CIEN. One month base followed by a breakout.

With CIEN (Ciena) we have a one month base followed by a breakout in good volume.
Between August and November of last year the price and MACD (12,26,9) formed a positive divergence and between November and March the price formed higher lows. In the fundamental side the price/book equals 3.19, allowing some upside movement.
We only thing twice because the long term trend is not very favorable, but considering the very good short term pattern, we favour a long position placing a stop loss close to 27.8 at the end of the base.


Wednesday, April 25, 2007

Tuesday, April 24, 2007

Toyota: new King in town

It is real. It is a milestone. It is something that seems like a new age:

It is bad news for GM? Possibly, no. Wagoner was cutting fleet contracts, which contribute mainly to poor margins. But Toyota is telling to the world, that its long term strategy is paying off. Toyota long term strategy focus on quality and efficiency is paying off.

Let's see, if automakers will learn the same way Boeing did in the past. Boeing faced EADS (Airbus), and is again on top of the hill.

Again, automakers need new corporate leadership like Sloan or Iacocca.

Wednesday, April 18, 2007

Oil prices

The "io-io" business is very well. After the Iran hostage's crisis had been solved, the tide will move down.

But, some clues for the next months:
  • In its weekly inventory report, the Energy Information Administration said oil and gas refineries ran at 90.4 percent capacity, up from 88.4 percent a week ago.
  • Refineries had suffered a string of accidents and other unexpected shut downs in recent weeks, which along with strong gasoline demand and a draining of winter blends had pummeled gasoline stockpiles and helped push retail prices to nearly $3 a barrel.
  • EIA said gasoline demand averaged 9.4 million barrels per day over the last four weeks, up 2.5 percent from the same period last year. The average rate of demand increase is about 1.5 percent.

Let's bet that we will have a hot summer!

Note: yellow colour is the oil company's index; blue colour is the Nymex daily.

Monday, April 16, 2007

Boston: return to heaven?


After several problems, Boston Scientific is returning from hell:
  • Reshuffle the board governance.
  • FDA warnings.
  • Stents quality.

Can we take it for granted? Or the Guidant purchase still is the major obstacle?

Wednesday, April 11, 2007

Going deep....


This is wishful thinking! The real estate and mortgages issue in US, will spread in a major way. Even the IMF will assume that risk: Although there have been some "tentative signs of stabilization" in the troubled housing sector, the "housing correction still has a way to run," the IMF said. "A turnaround in residential construction is still several quarters away."

In a scenario like this, IMF speaks in a world economy growing at 4.9%. This is bullshit! Especially, if we look to the main driver's growth:
  • The U. S. economy is expected to grow by 2.2 percent this year.
  • In Europe, the IMF is projecting Germany to expand by 1.8 percent this year, an improvement from a previous projection of 1.3 percent growth.
  • Britain should see economic growth of 2.9 percent this year.
  • Japan, meanwhile, continues to recover from a decade-long stagnation. It is expected to post economic growth of 2.3 percent this year.

The emerging markets are doing well, but their weight is not so big in the world economy:

  • China, is expected to log blistering growth of 10 percent this year.
  • Russia is expected to see economic activity increase by 6.4 percent this year.
  • India, which grew by 9.2 percent last year, will moderate to 8.4 percent this year.
How could it be possible, to grow 4.9% in 2007?

Monday, April 9, 2007

The io-io business

In a week, it is a question of US inventories: oil is up.

Next week, it is a question of a riot in Nigeria: oil is up.

In another week, it is a hurricane in Caribbean: oil is up.

Last week, Iranians put Brits back home: oil is down!

What a huge business, for traders. And for owners!

What about the consumers!

Today, we see this: Crude oil plunged $2.77 a barrel in New York, the biggest decline in three months, on speculation that an Energy Department report will show U.S. inventories jumped last week as refiners unexpectedly shut units.

Thursday, April 5, 2007

Kirk is back


Kerkorian type of investor is very good, to clean the mess! No doubt, Chrysler will benefit from this approach. And, for us, we think Chrysler value is bigger than 4.5 billion dollars.

This is another ingredient to the rearrangement of the auto industry in America.

In another planet, we read this: Alan Mulally, who succeeded Bill Ford last year as chief executive of Ford Motor Co., received compensation valued at $39.1 million in his four months on the job in 2006, including an $18.5 million bonus related to his signing and awards he gave up when he left his previous employer Boeing Co., according to a regulatory filing Thursday.

This is not good for Ford. To earn 39.1 minus 18.5 million dollars in four months says that the Ford Board did not make its appropriate job!

Monday, April 2, 2007

JBLU. Will the price break the one month support?


The last month JBLU form a base after some move down. The last tree days we have some evidence for a breakdown. If the price breakdown the base we have some expectation for a strong move down. However be careful if the overall market moves higher.


Crossroads

We think the world economy is not in bad shape, but also seems like a plane trying to land! Soft-landing or hard-landing?

Some investors are viewing a recovery:
  • BlackRock Inc., Fisher Investments Inc. and Schroders Plc, which manage about $1.4 trillion, say stocks are inexpensive relative to bonds.
  • Profit of companies in the Standard & Poor's 500 Index, the benchmark for American equity, is growing faster than shares, and represents a yield of 6.53 percent compared with 4.65 percent for 10-year U.S. Treasury notes.
  • The gap -- the widest since 1986, according to data compiled by Bloomberg -- is encouraging investors because earnings forecasts indicate the U.S. will keep growing, while bond yields show confidence that inflation will stay in check.

But:

  • The U.S. economy is slowing. Mortgage defaults are rising.
  • As many as 2.4 million Americans may lose their homes because of the collapse of subprime lenders and foreclosures.
  • Economists at Morgan Stanley, Nomura Holdings Inc. and HSBC Holdings Plc reduced their first-quarter U.S. economic growth forecasts last week after a report on durable goods orders raised concern a decline in business spending was deepening. Morgan Stanley cut its estimate to 1.6 percent from 2 percent.

Investors does not like uncertainty. We do not like clouds on the horizon!

Sunday, April 1, 2007

Are we near a new war?

In an economy, there are some sectors that benefits from war, like: equipment manufacturers, from planes to boots, from food to fuel!

Iranian - British fight because of waters, it is reminding us about some old memories:

We are near a possible war, after this remark: President George W. Bush said Iran's seizure of 15 British sailors and marines in the Persian Gulf is ``inexcusable'' and the U.S. stands behind the U.K. government in its attempts to resolve the standoff.

Stocks to watch, especially in a bear market: Lockeed-Martin, Boeing, Northrop, Exxon-Mobil, Chevron and gold!

But, we will continue to watch internet stocks and healthcare business.